Hang On Because The Chaos is Going to Accelerate

Today John Embry told King World News, “...the chaos will accelerate,” and “...before this ends, it will be cataclysmic.” Embry, who is Chief Investment Strategist of the $10 billion strong Sprott Asset Management, also discussed market manipulation.  Here is what Embry had to say:  “The fact that this LIBOR scandal has come to the surface is interesting.  It’s an indication of the depth of the corruption in the system.  The LIBOR scandal is just one of the many manipulations going on in the world at this point.”

“To me the biggest one and the longest running manipulation that no one will acknowledge is the gold and silver suppression scheme.  This has been carried out to keep interest rates at low levels, and to suggest that the monetary policy being invoked is correct.

To me, the best thing about the LIBOR scandal is more people are going to start waking up to the fact that virtually everything in these markets is fake....

“There is no better example than what happened in the latter part of last week.  Here we had two days that would, if left to its own devices, the gold and silver prices would have rocketed higher. 

First, we had broad easing across the globe from countries like China, England, the ECB, but the gold price got pummeled when all of this was announced.  The next day we had a terrible US jobs report, which suggests QE is coming quickly, but gold was hit for a second time.

This was in the face of back to back situation that should have made gold move higher.  So anybody that thinks this was normal trading action is simply naive.”

Embry also noted: “I get a huge kick out of the sentiment in the gold market, which as you know, Eric, is extremely negative.  We are to a point where we are dealing with very little on the downside in gold, but thousands of dollars on the upside.  This is one of the best buying opportunities in history.

The Chinese get it, and I think a number of the Eastern powers get it.  They are just delighted that gold continues to be suppressed.  From all of the information I get, more and more gold is headed in that direction (to the East).

I would also like to add that recently I have seen more comments discussing the degree to which allegedly allocated gold, in the banking system, isn’t there.  You had a great interview a while ago with Egon von Greyerz on this subject.  But I’ve seen subsequent comments that have confirmed everything von Greyerz was talking about.

Anybody that thinks they have allocated gold held in a bank, I would strongly suggest they go to that bank and ask for their gold immediately because I don’t believe a lot of it is there.  In the end, I think some people who thought they had gold stored in a bank are going to get seriously hurt.”

Embry had this to say regarding Europe:  “When it comes to Europe I usually defer to Nigel Farage, but the fact is they haven’t solved a damn thing.  This morning Spanish rates are starting to challenge the highs, and they are talking about giving them more time to get their budget in order.  But there is no way on earth they can get their budget in order.

When you’ve got the serious financial situation Spain has, there is no easy out.  You can’t use austerity to get your budget fixed.  All of this recent activity has just been a holding action and nothing has been solved.  I find the whole European thing tragic.  This situation in Europe is only going to escalate. 

The problem for the central planners, in the not-too-distant-future, is the can is getting too big to kick down the road.  What this means is that the chaos will accelerate.”

Embry also added:  “I talk to a lot of people and the general mindset is that what is happening right now, this is just business as usual -- There are problems but we can deal with them.  I saw an amazing interview where Byron Wien spoke to the man he called the ‘smartest man in Europe.’

The man laid out the picture that we are headed for a train wreck.  And Bryon Wien, who’s always been a typical Wall Street shill, at the end of the interview he sort of said, ‘Well I respect your views, but I’m an optimist and I think we can work through this because the powers that be can deal with it.’ 

Byron Wien is wrong.  He’s dead wrong, but that’s the typical mindset that’s out there.  I will tell you today that before this ends, it will be cataclysmic.”